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Thegame316 good post and yes a very irrational SP I agree with your reasoning
IAG's problems are due to Boris "the knob" Johnson. The idiot can't see that we need to introduce airport testing asap. All other major countries like Japan, Germany and France have got some sort of testing in place. This has led to an increase in air travel in those countries as people are more confident of travelling. For some reason despite the air travel industry pleading for this he has refused to implement it.
That is the main reason why IAG is as bad as it is now as its main base is Heathrow. RR on the other hand is not just dependent on UK air travel. Worldwide the number of flights are steadily increasing and that is what counts. There is still a long way to recovery yet but that is exactly what this is, a recovery. At the height of the pandemic when all flights were grounded and there was no idea when they would resume RR's price was at the £2.50 level. Now air travel is at over the 50% level at a world wide level and RR's price is £1.50. If this isnt an irrational price then I dont know what is.
If we can get to november with no funding and then we get a trading update saying civil aerospace has recovered to the point where no further funding is required then a rerate is definitely due.
OutTheGame
“the other has other businesses that are hugely profitable and has a world wide presence”
Hugely profitable?
A £5.4 billion loss in the last financial year suggests otherwise. If Rolls are hugely profitable why are they about to go cap in hand to investors for the princely sum of £2.5 billion?
Toff
Comparing IAG to RR is like comparing apples to oranges. One is a business limited to air travel and geographically constrained, the other has other businesses that are hugely profitable and has a world wide presence. Its a bit like saying my local newsagents closed due to covid so the tescos down the road will be closing too as it also suffered a downturn in business.
@Casajaluma- so you are saying the sp will be under £1 soon. That will not happen. It is easy to look at the current downtrend and assume this and its also easy to call people dicks for buying in at a higher price and thinking they did so blindly and assuming they were getting a good price. I hate to burst your bubble but you really haven't got a clue especially on your views of other investors. Most of us have done our research and have brought in based on the fundamentals. Fact is we are in an irrational market and as long as the investor can stay solvent and wait for the market to become rational again then there is nothing to worry about.
The issues with Trent were long known. And if you do your research you will find that there have been more other engines from other competitors that have also had teething problems in the past 20-30 years but these companies are still around. Jet engines are complex machines and things can and will go wrong These issues are being resolved and the cash impairment due to this was incorporated into the sp way before the covid situation.
The market is currently fixated on the civil aerospace business and is neglecting the fact that RR has over £6bn revenue and over £700m operating profit from other business's. I agree the funding news is a major issue but this could also be a blessing in disguise. Right now every deramper is harping on about a heavily discounted rights issue that will decimate the share price yet not one person can prove that this will happen other than rumours on click bait sites.
For all we know they could be in talks with a sovereign fund who would provide the money without issuing new shares. Fact is nobody knows. For me personally ive got no worries. I can afford to wait this out for a year or two or more and I can also average down if the sp does go below £1. But in the end the sp will go back over £5, it could take 1 month, 3 months or 5 years.
And just as you say people can come on here saying positive things and trying to affect the price similarly people coming on here posting multiple times the sp will go below £1 are deluding themselves as well if they think they can influence the sp too
Anyone uncertain what to do should just look at the mess IAG shares are now in on the back of the Rights Issue. Until financials are sorted I wouldn’t touch this again with a barge pole
Intoo
“As tempted as I’ve been to buy more at these levels to average down, I’m holding until clarification around financials”
That’s a sensible decision. Right now you’d be buying into too much uncertainty and markets hate that. Better to wait for the fog to lift and the shareprice to start heading north before adding. You may miss the bottom that way but it’ll be worth the small premium.
Right now no one knows where the bottom is
Toff
exactly another intelligent person - welcome
As tempted as I’ve been to buy more at these levels to average down, I’m holding until clarification around financials as I just don’t see this holding any rises in SP until then, it’s just a day traders playground at the moment. I have dry powder and can and will double down here but not until there’s financial clarification and real progress in combating Covid. GLA
actually know - and yes i will be buying in sub 100 - everything i have said so far has happened sunshine
so before spouting c rap - look at harsh reality about whats going on around you
oh school must be over in Portugal as Casa is bombarding the board again :)
why do you spend all your time here when you have no skin int the game .... are you seriously waiting for 100p and then your going to buy in and try and ramp it up ?
Your pi55ed becuase you bought in earlier in the year and sold at a loss so now you just want to lord it over people every minute.
you are right- most of the posts are from people who have bought in thinking they were getting a good price and did not pay attention to advice - now they are crying and doing or saying or posting anything to try and drive the price up- doesnt work like that. they should look at averaging down at sub 100p to keep them in the game for the return of this share if and when they get funding or govt support
Casa
“if there is an RI, there will be a discount on SP at the time and buyers will expect 20%.”
Thanks for the heads up mate but I don’t see my posts as advice - I view them as the objective opinions from someone experienced in market psychology.
There are however, a few basic tenets that green traders continually make.
Such as...
Averaging down in a losing position time and again so they end up all in with one share and compounded losses
Any trading textbook will advise you to diversify- not only in companies but in sectors. It’s madness to put all your eggs into a falling basket.
Most of the posts on this board are subjective opinions from the emotionally involved - and engender lots of desperation. That is the instinct of herd animals and one I see an abundance of here
Toff
toff - on board making sense - knows the harsh reality - well done - will anyone else wake up !!!!
interesting view of us who know what we are talking about but we are being filtered off this board- guess everyone wants hear that shares are great and the sp will be 500 p next week - why because these dicks didnt listen and bought against advice and still are not listening and dont want to hear realitiy.
these were the kids who were sen t in the corner at school for not paying attention.
hahaha
anyway sp will drop sooner than you want to around circa 100p - are you paying attention
Doyee
‘if there is an RI, there will be a discount on SP at the time and buyers will expect 20%.’
Rolls might have left it too late for an RI. The more the shareprice falls the less they’ll be able to raise.
At a one to one with SP @156 investors would have to stump up 129 for every new share to raise the required £2.5 billion
I fear they’ve left it too late - indecision may have cost shareholders everything.
The alternatives are a capital raise - where Rolls will bypass retail investors and issue new shares to institutional investors (as we’ve seen with ASOS & Wetherspoons)
Or bailout from the government (part - whole nationalization) in a debt for equity swop.
Toff
Until this capital raise/selling of assets is confirmed one way or the other, this will continue down in my opinion as if there is an RI, there will be a discount on SP at the time and buyers will expect 20%.
Cant believe it is this actually gonna hit a pound . Losing me short. More prayers needed .